According to experts, changing weather patterns in Rajasthan, India's top spice grower, have upset the demand-supply balance, and a large cumin shortfall has driven demand skyrocketing. The silver lining is that growers are receiving a fair portion of the market price as a result of a change in how the spice market operates.
Farmers have essentially defeated traders at their own game, as one farmer put it. According to the most recent official data, consumer inflation in spices jumped 18.21% in March, the most among retail food basket components. Cumin prices in Unjha, the nerve heart of India's spice trade in Gujarat, soared to more than 40,000 per quintal (100kg) last week, according to market data.
Estimates by the Federation of Indian Spice Stakeholders (FISS) showed that the overall area under cumin in Gujarat and Rajasthan expanded by over 13% from a year ago, and average yields were predicted to be 13.2% higher than previous year. Farmers denied this, claiming that harsh weather had shrivelled cumin, a grain-based condiment. "The industry and merchants expected a 26% excess a month ago. "That didn't appear to be right," said Bhagirath Choudhary of the South Asia Biotechnology Centre in Jodhpur, Rajasthan.
Choudhary, whose firm focuses on cumin quality development as part of a national government scheme, believes dealers are exaggerating output in order to reduce wholesale prices and squeeze farmers' margins. Simply put, when supply expands, prices fall. Choudhary's organization conducted a crop study on behalf of cumin growers and discovered that adverse weather had reduced not only output but also yields by about a third. The resulting demand-supply imbalance, which has raised cumin prices to an all-time high, demonstrated the impact of weather.
"As a result, farmers were armed with their own data, which is uncommon, resulting in the right price discovery," he explained. Cumin is planted in October, and crops arrive at the Unjha wholesale market in early March. "A large demand-supply gap has driven cumin prices to an all-time high," said Dinesh Patel, head of the Unjha agricultural market produce committee. The crop loss in Rajasthan is larger than in Gujarat, and prices are nearly double what they were in the same period last year, according to Ashwin Nayak, president of FISS, who added that they would alter their output projections.
Consumers are not simply suffering from rising prices. Choudhary, a farm scientist focusing on cumin, claims to have detected unexpected weather shifts in western Rajasthan, India's spice-growing heartland. "Winters are getting shorter, and a western warm wind has begun blowing in from Pakistan (bordering western Rajasthan) just as cumin crops are germinating in early February." This didn't happen until a few years ago, according to Choudhary. Farmers are dealing with newer and more intense pest infestations as a result, he said, urging climate change mitigation. Cumin output is expected to be about 550,000 bags this year, a 31% decrease from last year's total demand of 800,000 bags (55kg each).
"Unseasonal rains have also led to production losses in Rajasthan and Gujarat," said Patel of the Unjha market. FISS, on the other hand, claims that its assessment did not account for losses caused by rains in February and March and that it will modify its estimations. Choudhary, on the other hand, believes that "overestimation is neither beneficial to industry nor to farmers." The spot-price increase has had an impact on futures on the NCDEX, an agri commodities futures exchange, where they are trading 77% higher than last year. Futures (short for futures contracts) are contracts to purchase a commodity at a certain price at a specified date in the future.
Syria and Turkey were once considered India's main competitors in the global cumin industry. Geopolitical shifts and other factors have forced the two to reduce output and exports. According to Patel of Unjha APMC, there is renewed demand for cumin from China, which had stopped purchasing the crop in recent years due to Covid limitations. "The price increase could be the result of futures trading speculation." There is a new crop of jeera arriving, and some are attempting to artificially inflate prices. With Turkey removing jeera off its list of irrigation crops, India has an advantage in exports," said Yogesh Mehta, chairman of the World Cloves Council and a member of the Spices Board of India's Taskforce Committee Seeds and Spices.
